PIERRE, S.D. – The South Dakota Public Utilities Commission this week agreed to grant Xcel Energy a 6.86 percent increase in base rates. The new rates, plus a 2.2 percent increase associated with a new infrastructure rider, will go into effect for Xcel customers on May 1, 2013. The overall increase for customers in 2013 is approximately 9.06 percent, less than the 11.53 percent the company initially sought.

The increased rates will allow the company to bring in approximately $15.3 million in additional annual revenue in 2013. 2014 rates will include an additional estimated 1.44 percent increase through the infrastructure rider.

The commission's action came at its regular meeting on April 9, 2013, where a settlement stipulation between Xcel Energy and commission staff was considered. The settlement includes details of the infrastructure rider that the company will be allowed to implement in order to recover a portion of the costs for capital projects and property taxes in 2013 and 2014. In exchange for the rider, Xcel agreed to not file any rate application for an increase in base rates which would go into effect before Jan. 1, 2015.

PUC commissioners Gary Hanson, Chris Nelson and Kristie Fiegen heard testimony from expert witnesses, asked questions of company officials and commission staff analysts, and read hundreds of documents before making their decision.

"Rate increase requests are very, very complicated cases," said Commission Chairman Gary Hanson. "I know PUC staff and Xcel have had numerous and thorough negotiation sessions leading up to this point and professional staff has made many adjustments to keep this rate increase in check. The retrofitting, upgrading and even the closing of coal and nuclear plants, and the construction of new generation and transmission facilities needs to be funded," he said.

Vice Chairman Chris Nelson shared Hanson's sentiments about the difficulty of the commission's decision. "This is a very tough vote for all commissioners," Nelson said. "I understand that capital investment is part of running a business and that capital investment is necessary for the reliable provision of service. It's still a tough vote to make," he said.

Commissioner Kristie Fiegen expressed appreciation to the parties for coming together to reach the settlement. "The cost of complying with EPA mandates, renewable energy mandates and electrical usage growth require massive infrastructure spending," she said. "This settlement eliminated the significant cost of filing and processing another Xcel rate increase this year and does not include other expenses that would appear in another rate case filing. It is a better result for ratepayers than the alternatives," Fiegen concluded.

As allowed by state law, Xcel implemented an interim rate increase on Jan. 1, 2013, reflective of its initial rate increase request. The company will refund to customers the difference between the interim rate and the final approved rate, with interest, during a monthly billing cycle beginning no later than July 1, 2013.

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Note for editors:
Visit the South Dakota Public Utilities Commission docket EL12-046 online for more information about Xcel Energy's rate increase request.